Agriculture and the budget

Published Jun 05, 2012 06:08am

HYDERABAD: Budgetary estimates for 2012-13 presented last Friday, have nothing exceptional for farming sector. Farmers say it leaves a lot to be desired.

Agriculturists don’t feel comfortable with the new budget. While it is understandable that agriculture sector is a devolved subject but point out that when government has come up with allocations for health and education sectors, which, too are devolved ministries, agriculture should have been given considerable allocations in some sectors.

According to them, the Rs405-million allocation for bio-technology, hybrid seed production for enhanced crop production, agriculture research, among others is nominal. In water resource development, an allocation of Rs38.2 billion is earmarked for irrigation projects including small and medium dams, check and delay action dams, canals and improvement of existing irrigation system will for living of irrigation channels in saline zones in Punjab, Sindh and Khyber Pakhtunkhwa Rs3 billion is allocated. Again, they say, it will not be helpful.

The levy of 16 per cent GST on goods remain unchanged – something that is in sharp contrast to the demand of farmers’ bodies that it must go or at least drastically reduced - given the fact that it has a direct impact on their per-acre cost of production.  Agriculturalists see no relief in terms of cost of diesel, whose frequent hikes are dealing a blow to the sector.

Successive massive floods in 2010 and 2011 hit the irrigation infrastructure in Sindh, rendering colossal damages to irrigation channels, distributaries and canals.  Irrigation system has a direct linkage with agriculture sector if enhanced productive is to be achieved. Huge silt deposits in canals and subsequent delay in de-silting of canals has always be a matter of concern for growers because their farmland especially those at tail-end of canal system don’t get regular supply of water even when there is adequate flows in the system. The situation gets complicated when there is severe water shortage.

Therefore the farmers want the government to pay serious attention to rehabilitation of damaged irrigation channels in the wake of 2010 super floods and 2011 heavy rains. In 2010, the super floods mainly hit areas located on right bank of River Indus and 2011 heavy rains damaged water channels and saline water drains in areas located on left bank of the river.

“The top priority of Sindh government in 2012-13 fiscal year’s budget should be rehabilitation of drains and canals infrastructure and we expect the government to handle the situation cautiously”, says Dr. Nadeem Qamar, president Sindh Chamber of Agriculture (SCA). He says the allocations for health and education are higher than agriculture sector.

Agriculture is one of the sectors devolved to provinces following the implementation of the18th amendment in April 2010. Provincial government is now supposed to come up with concrete measures to deal with agrarian economy. They realised that government did execute repair works for dykes at the cost of Rs5 billion after 2010 super floods and another Rs1.5 billion were released to repair damages to water channels following last year’s rains.

Sindh’s two main farmers bodies have submitted their proposals to the provincial finance minister, hoping to acquire due space in the Sindh budget, likely to be revealed this Friday. A great emphasis is attached to transparent utilisation of funds allocated for irrigation channels’ repair.

“We badly need an efficient irrigation system which plays an important role in agriculture sector therefore it should top government’s list of priorities in forthcoming budget”, points out Mehmood Nawaz Shah, general secretary of Sindh Abadgar board, a vibrant farmers’ body.

Qamar points out that 16 per GST and 2.5 per cent withholding tax don’t go down well with farmers.

“Two-and-a-half per cent withholding tax is paid by ginners and rice factories owners to government. In fact we pay it for them, practically. They [rice or cotton factory owners] will not pay 2.5 per cent withholding tax…they will add it in the cost of cotton and paddy to be paid to us so we will be at the receiving end”, he adds. He simultaneously underscores need for quality seed production. This can be done by federal government run Pakistan Agriculture Research Council (PARC).

“But unfortunately I don’t see anything being allocated for PARC in [federal] budget”, he says.

Rising cost of inputs, according to him, has made agriculture less profitable sector. Since prices of inputs keep increasing situation puts them in an uncomfortable position. Levy of GST has an adverse impact on them. Farmers say that number of subsidised tractors needs to be increased in Sindh in order to promote mechanised farming.

“The government provided tractors at subsidised rates but most of them were of inferior quality”, says Gada Hussain Mahesar, a veteran paddy grower in upper Sindh region. When unscrupulous people in government claim commission in procurement of tractors they compromise its quality, he alleges.

“Since the commission is paid by the concerned company, it will fit substandard spare parts to avoid losses and we witnessed that tractors were fitted become dysfunctional within a matter of few days”, Mahesar explains.  He feels that now yearly budget doesn’t matter. “There is budget every day or every fortnight

For Mehmood Shah, agriculture implements have a dominant role for crop maximisation.  Therefore, he says, government should increase its allocation for tractor from Rs100 million to Rs200 million in subsidy in 2012-13 budget.  Lining of watercourses under on-farm water management programme is another important area, he adds. He says that with lined watercourse, seepage and water losses are controlled.

Sindh government plans to increase provision of subsidised tractors’ provision in the 2012-13 budget. A proposal to this effect is reported to have been floated by agriculture department to Sindh government for water conservation measures. Lining of water courses will continue.

Mahesar remarks that growers should be allowed to import tractors from any country they like to get a quality product. “If subsidy is given by government on tractors fitted with inferior quality spare parts it will not serve the purpose so it is advisable that growers should be permitted to import tractors from country of their choice”, he says,

Mehmood Shah believes government should seriously ponder over credit financing for farmers.  Sindh needs credit in line with its contribution to national agriculture economy. “Sindh’s contribution in agrarian economy is around 23 per cent but we get only 10 per cent credit.  Punjab alone gets 80 per cent of loan from Zarai Tarqiyati Bank Limited while rest 20 per cent is to be diverted to remaining three provinces.

Despite having two disasters in last two years, Sindh gave surplus production of wheat yet prices of crop remain low, for flawed procurement policy. Sindh had surplus after 2010 super floods and a bumper cotton crop was expected in 2011 when rains hit badly left bank region that is known for cotton production.

Standing rice crop was washed away in super floods of 2010 in right bank areas of upper Sindh causing colossal monetary losses to farmers.

In 2011 kharif crops of cotton, sugarcane, chillies, vegetables, rice and mango orchard on around 2.2 million acres are badly hit in areas located on left bank of River Indus. Left Bank area of lower Sindh region is considered the breadbasket of Sindh province.

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